GM, Chrysler reopen merger talks as cash supplies dwindle

[Oracle of Delphi]

Automotive News Europe

December 18, 2008 06:47 CET

DETROIT (Reuters) -- General Motors and Chrysler LLC have reopened merger talks, as Chrysler owner Cerberus Capital Management LP has signaled a willingness to give away part of its ownership in the automaker, the Wall Street Journal reported.

With cash running low at both companies, Cerberus took the initiative to restart discussions that sputtered just weeks ago, the paper said.

The renewal of the talks could be a way for Cerberus to show Washington, which is weighing a $14 billion rescue package for GM and Chrysler, that it wants to cooperate in restructuring the industry, the paper said, citing people familiar with the buyout firm's thinking.

The renewal could offer Cerberus a way to protect its stakes in two distressed auto-finance companies, GMAC LLC and Chrysler Financial, which are crucial to the survival of the Detroit automakers, according to the paper.

GM and Chrysler could not be immediately reached for comment by Reuters.

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http://online.wsj.com/article/SB122957294608617461.html

[Dragon]

http://www.cbc.ca/money/story/2008/12/18/merger-talks.html

It must be true, they are already denying it